Yes. I welcome the opportunity to speak on this Bill but must note that like so many other extremely important legislative items, this Bill is being rushed through the House and this is entirely of the Government's making. It is time that when Members are trying to effect fundamental change, they take the time to do it properly. It frequently happens that efforts to get an answer or a fix result in the creation of a chaotically complicated system that no one understands fully. The first point with which I will agree is one which when in government, Fianna Fáil was trying to explain to the members of the current Administration, namely, that if one is continuously spending more than one is taking in, it is not sustainable and something must give. I am glad the Government realises that for the long-term stability of the country, one must balance the books.
In terms of the second thing the Government has realised, when in opposition it thought that by cutting the salaries of a few higher paid people it would raise huge sums of money. Anybody could have told it that the public service is a pyramid, with many more people at the bottom than at the top, and therefore the amount of money it would save by making significant cuts at the top end would never be great in financial terms but this Government always tried to give the impression in opposition that this alone would save the billions of euro needed to be saved. When the hard reality hit, however, it realised it does not work like that and that its basic mathematics were wrong. I believe it is important that the people at the top take the biggest cuts by a fair distance, not because it will save the Government a great deal of money but because it is important from the point of view of example.
I am surprised to see the proposal in the Bill to cut those in the public service earning over €185,000 a year by only 10%. It is derisory and it is very difficult to explain the reason for those cuts to people who are experiencing cuts in different directions, heaped with extra expenses, living on €30,000 and €40,000 a year and who are working hard. When the salary of someone on €185,000 a year is averaged out, it probably works out at 6% or 7% of their total salary. I do not believe people think that is fair or leading by example.
We are then told that these cuts are only temporary. I hope they are only temporary for those at the lower end but at the higher end there is a need to bring down high pay in the private and the public sectors to reasonable proportions because the wealth of society is not only the total wealth created. We would look to societies throughout the world where those with huge wealth and those in huge poverty live side by side. There are two things a country must do. The first is to create wealth and the second is to distribute it fairly but, unfortunately, in the western world the second one seems to be losing out, and each group at the top end appears to argue cogently that they are entitled to these enormous salaries when ordinary people are struggling. We must have a much more comprehensive debate than this Bill will allow on the entire structure of wages in our society.
I heard a Deputy boast earlier that we did not cut social welfare. I am glad the Minister of State, Deputy Ring, is in the Chamber. If my memory serves me right he is in the county with the biggest number of farmers on farm assist. Does he know what he has done? If a farmer is earning €100 a week on farm assist from his farm, he or she has lost €30 per week in the past two years courtesy of the Minister of State's Government. He or she is effectively paying 100% tax on the farm income, in other words, one euro of social welfare is taken off for every euro earned on the farm income.
The Government has hit lone parents very hard. I cannot understand, when we have a female Minister, why the Government has hit pensioners who had a low average because they may have worked between the ages of 18 to 25 or 30 and took time out to rear children, which in my view is a very important opportunity that some people chose or were forced into. It is not necessarily the only choice but it is a valid choice that society should recognise. They then returned to the workforce. For some reason that Minister hit them hugely in terms of their pensions, and these are people at the bottom end.
We then had the across-the-board cut imposed on pensioners. The Minister of State would say the Government did not touch the headline rate. It did not; it just did it through the household package but a euro is a euro, and it has cut the household package significantly. At the same time for those earning more than €185,000 it proposes to make a cut of 5.5% on any amount up to €80,000, 8% on the amount between €80,000 and €150,000, 9% on the amount between €150,000 and €185,000, and 10% on the amount over €185,000. To someone earning €200,000, therefore, that 10% only relates to €15,000 of that salary. When it is averaged out the cut is between 7% and 8%. I will work out the figure in the next few days but it does not make any difference to the principle.
I believe it was wrong not to honour the Croke Park agreement in full and work it to its ultimate end because in terms of quality of service, there were huge gains to be achieved in honouring an agreement and seeing it out to the end of its term. In terms of the chaotic way all of this has been negotiated, when it could not get the union movement as a totality to agree, sweeteners were given and side deals done union by union. That is a very bad precedent in terms of public service negotiation. I can see in the future a template that the Government has created causing mayhem where certain unions it has now put into a very strong position will be able to negotiate extraordinarily good deals for themselves by this union by union methodology. That is a wrong way to approach this process.
I note there has been an amendment to the issue of the increments but just because public sentiment does not understand the structure of public service pay because it has not been explained properly does not give anybody an excuse to create inequalities. I know we did it but I have never been a great proponent of the starter pay being lower and people who have done the same period of service as other workers not being able to achieve the same pay as other workers. I believe in the concept of equal pay. We have now gone from gender equalities to age inequalities. I cannot understand how it is fair that if one happens to be at the top of the increment scale one is immune to this particular cutback but if one is at the bottom, one gets the cut. Surely that is unfair. My belief is that all public servants in similar circumstances should be cut by the same amount. That one has got to the top of the scale should not make one any more immune to the cut than the person who is on a much lower salary and is now being held back.
The reality of the increment scale is that it was part of the public service wage. It would be fair to say that if the increments are abolished we would have to bring the lower ones up to the mean and the higher ones down to the mean, and the mean would become the new wage. There would be no saving in that on average because over time people were constantly leaving the public service or moving up to new grades and they were replaced by people at the bottom. The myth that increments were costing so many million a year was mathematically not true because if increments were abolished, we would have had to adjust the basic wage to the mean and we would have ended up with the average wage bill we have now.